Hearing: Did Chinese drywall company hold back information?

AP News
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Posted: Dec 15, 2015 5:06 PM

NEW ORLEANS (AP) — Lawyers for thousands of people who say Chinese drywall made their homes unlivable told a federal judge Tuesday that the manufacturer held back critical information for years by failing to reveal a former official's whereabouts.

One document from Peng Wenlong's computers showed that Taishan Gypsum Co. Ltd. and parent companies plotted in 2009 to hold back unfavorable evidence, Russ Herman and Christopher Seeger told U.S. District Judge Eldon Fallon.

Herman read part of a letter from Taishan to the chairman and director of China National Building Materials Group stating that Taishan was not inclined to respond to a U.S. lawsuit, but would, if necessary, mail favorable evidence to the court and have "government departments interfere, so as to eliminate and reduce some negative impact."

"That's the really terrible conduct we have to address," Herman said.

Peng was manager of foreign trade for Taishan when it sold drywall that thousands of homeowners in six states say released sulfur fumes that made them sick and corroded metals, plaintiffs' attorneys say.

The document was among more than 380,000 sent to plaintiffs' attorneys in recent months, after they learned where Peng was working, Herman said.

"For months, we were told he couldn't be found," Herman said. He said they then learned he was working for a company run by the wife of Taishan's general manager and board chairman, Jia Tongchun.

He said Jia filed a "corrective declaration" about an earlier sworn statement: "I stated that Mr. Peng never told me name of the company where he currently works. ... While this statement was technically correct, I acknowledge it gave the misrepresentation that I personally did not know where Mr. Peng currently works, when in fact I do and did know."

Herman said the 2009 document also refutes claims that China National Building Materials Group, Beijing New Building Materials Group and affiliated companies sued as Taishan's parent companies had nothing to do with running Taishan.

Other information found on the hard drives of Peng's desktop and laptop could have eliminated costly trips across the country and to China to learn where Taishan's drywall had been sold in the United States, Herman and Seeger said.

Herman said the attorneys don't have the computers or hard drives, only material copied from them.

Taishan attorney Bernard Taylor said the years are irrelevant because Tuesday's hearing was limited to two questions related only to much more recent contempt of court proceedings: where Peng was and where his documents were. He said both were answered within months of being raised in the contempt proceedings.

The delay in getting the information did not hurt plaintiffs because they were still able to get data about Taishan's U.S. sales and win rulings that the case belonged in U.S. courts, Taylor said.

Fallon did not indicate when he will rule. Tuesday's hearing comprised closing arguments about evidence heard in November; those records are sealed.

Fallon heard testimony and evidence in June about how much Taishan Gypsum should pay people for damage from the drywall but has not yet ruled on that.